A 5-acre land parcel in Deonar in Greater Mumbai, belonging to Metal Box India Ltd, has been sold by the company to a private developer who is now planning to develop a portion of it for residential purposes, registration documents from the Maharashtra government showed.
The land parcel was sold to Kolkata-based Atia Estates Pvt Ltd for ₹81.9 crore late last month. Simultaneously, Atia Estates has also entered into an agreement with an entity belonging to Mumbai-based developer, Supreme Universal, to build multi-storied buildings and residential units on 4.5 acre of the total land available.
Metal Box, set up in 1933, became a victim of industrial unrest and rampant trade unionism in West Bengal in the 1980s was declared a sick company and is undergoing a process of rehabilitation.
In recent years, corporates, with significant unutilised land holdings in Mumbai, are taking initiatives to monetise them by developing them either for commercial or residential purposes. Debt-laden companies struggling with cash flows are also taking advantage of the revival in residential demand in the financial capital to either sell off their land or are tying up for joint development projects.
Textile firm, Raymond Ltd, entered the real estate space in 2019 with Raymond Realty, while Century Textiles and Industries Ltd’s Birla Estates is utilising its parent’s land to develop and sell premium residences in Mumbai.
This has freed up considerable land for development purposes in Mumbai, where land is at a premium. It benefits the owner in terms of monetising fixed assets that are otherwise lying idle, while developers bring in their expertise and get development rights to premium land that they would otherwise would not be able to access.
Documents made available by data analytics firm, CRE Matrix showed that, under the development agreement, Atia Estates would be getting 20% revenue share with a market value of around ₹140 crore, while the developer would have 80% revenue share in the project with a market value of over ₹311 crore.
In addition, Atia Estates would also be getting ₹70.7 crore from the developer in a phased manner for grant of the development rights.